Gold prices continued their recent slide today plunging down to $3,300, their second day of decline in a row. Regulatory burdens have undoubtedly played a part, especially at the surface transportation level, but market factors have stoked a downward trend. Consequently, investor sentiment has turned 180 degrees.
In particularly timely fashion, gold prices have recently declined to continue this trend of heightened market risk appetite. That has created another wave of demand for the U.S. dollar. As investors look for riskier assets, they are doing the opposite and selling gold – historically seen as a safe-haven investment. Analysts think the more positive economic news is driving this change. They cite uncertainty over ongoing negotiations in the U.S. Senate over tax reform as a major contributor.
The recent EUR/GBP — GBP/USD exchange rate has crashed. It has fallen through 1.3550 as currency traders continue to hold their breath in anticipation of important US economic data. This uncertainty leading up to key U.S. economic indicators is fostering choppy sentiments in the currency market and thus adding to volatile gold price movement.
“Gold price drops to $3,300 amid risk-on impulse, reviving USD demand.” – FXStreet
Michael Suppel — a market investor analyst specializing in gold coin investments — currency fluctuations are starting to have serious effects on gold investments. Yet, market optimism overall is undoubtedly impacting this landscape as well. Traders are jumping on these moves. Until then, they can expect at least a little action as gold prices jump around in reaction to the promise of an improved economic picture.